North Korea said yesterday it would restore a hotline with South Korea and proposed holding weekend talks in a border town, as the two rivals sought to ease months of soaring military tensions.

The two Koreas unexpectedly reached a snap agreement on Thursday on opening a dialogue, with South Korea responding to an initiative from the North by offering a ministerial-level meeting in Seoul on Wednesday.

A spokesman for Pyongyang's Committee for the Peaceful Reunification of Korea (CPRK) welcomed the South's quick response, and suggested initial lower-level talks tomorrow in the Kaesong joint industrial zone.

The North shut down Kaesong, which lies just over its side of the border, in April as the recent crisis on the divided peninsula peaked. Reopening the joint complex will top the agenda for the proposed dialogue.

"Working-level contact ... is necessary prior to ministerial-level talks proposed by the South, in light of the prevailing situation in which bilateral relations have stalemated for years and mistrust has reached an extreme," the CPRK spokesman said.

South Korea's Unification Ministry said it was "studying" the offer.

The hotline, suspended by the North in March as military tensions flared, was scheduled to be restored at 2pm yesterday, the CPRK spokesman added.

The Red Cross link runs through the border truce village of Panmunjom and has long been a vital source of government-to-government communication in the absence of diplomatic relations.

The last working-level talks between the two countries were held in February 2011, and there have been no inter-Korean talks at the ministerial level since 2007.

The agreement on resuming a dialogue came just ahead of yesterday's scheduled summit between US President Barack Obama and Chinese counterpart Xi Jinping , at which North Korea's nuclear programme is expected to be on the agenda. North Korea's nuclear test in February resulted in tightened UN sanctions and triggered the cycle of escalating tensions that saw Pyongyang threaten pre-emptive nuclear strikes against the Unites States and South Korea.

China, the North's sole major ally and economic benefactor, has been under pressure from the United States to restrain its neighbour, and both Washington and Beijing welcomed the tentative talks agreement.

Yoo Ho-yeol, a North Korea expert at Korea University in Seoul, said North Korea's surprise shift towards talks signalled a desire to initiate a wider dialogue in the future that "would eventually include the United States".

But US State Department spokeswoman Jennifer Psaki made it clear that North Korea would have to show some commitment towards abandoning its nuclear weapons programme before the US got involved.

"There remain a number of steps that the North Koreans need to take, including abiding by their international obligations ... in order to have further discussion," Psaki said.

Pyongyang has repeatedly insisted that its nuclear deterrent is not up for negotiation.

The proposed agenda for the North-South talks involves the reopening of Kaesong, the resumption of tours to the North's Mount Kumkang resort and renewed cross-border family reunions.